Does your heart say, “Scotland, Greece, and Fiji”, but your bank account says, “gas station food and generic brands”?
Lucky for you, gas station food and generic brands are still fabulous. But, if you’re trying to save for a vacation, this type of bank account statement just won’t do.
So, how can saving for vacation ever be in the cards?
Many people struggle to save money and live paycheck to paycheck.
So, even if it seems like your peers are living the life of luxury, the reality is they may not be. And, if they are, ask them how they do it!
Travel warriors do exist. And, becoming like them is a possibility, but it won’t be easy at first.
You’ll need to be prepared to change your lifestyle, some of your plans, and your spending habits. But, as you might imagine, it takes dedication and sacrifice to save up. Which, is all really difficult when you have the urge to go on a shopping spree.
Read on to discover exactly how to get started saving for a vacation.
7 Tips for Saving for Vacation
We all know that money doesn’t grow on trees. But, we can grow our savings accounts with the right guidance.
Explore the following tips to learn how to save for a vacation.
1. Research Your Vacation
Before you start saving for your vacation, it’s important to research your desired destination. Discover how much hotels cost in the area and food/entertainment prices. It’s also beneficial to research the crime rate, culture, and tourist attractions in the area.
This will give you a better idea of what to expect and if it’s worth your money. You can also read online reviews to determine how other travelers felt about their experiences.
2. Determine a Price Range
After you feel comfortable with your destination, it’s time to dig deeper into your travel plans. During this phase, you will research more about your dream vacation to create a price range.
To start, select a maximum price you’re willing to pay. Research plane tickets, hotels, and other expenses that fit within your budget.
Then, see where you could cut costs, such as booking a cheaper hotel and flight. Consider hostels, public transportation, and discounted tourist trips as well.
3. Open a Separate Bank Account
To really know how much you saved, you need to open a separate bank account. That way, you can monitor exactly how much you have towards your vacation.
Go to your bank and ask to open up a savings account. Ask about the minimum amount you need to have in the account to avoid any fees.
4. Cut Costs
This part is difficult for many. This step requires you to truly make saving for vacation a priority.
Start cutting costs by first looking at your bank statement. Notice what you’re spending your money on. Then, see what expenses you can reduce or eliminate.
Ask yourself, “what am I willing to give up?” Maybe it’s your morning coffee. Or, maybe it’s eating out every day.
Then, find alternative ways to meet these needs and create a detailed plan. For example, purchase instant coffee or use a coffee maker. Or, pack your lunch and cook at home.
You can also look at your bank statement and ask yourself, “what truly brings me joy?” For example, maybe your morning coffee is your favorite part of the day. Instead of eliminating that, consider eliminating something you don’t enjoy as much, like going bowling.
Cutting these costs may seem daunting at first. But, anytime you’re feeling frustrated, just imagine yourself in your dream location.
Keep track of how much money you’ve saved, and transfer the extra cash to your travel savings account.
5. Get Some Side Gigs
The internet opened up the doors for side gigs. You no longer need to mow lawns or go door-to-door to make extra money. Instead, you can take surveys online or open up an e-commerce store.
You can also go the traditional route and babysit, walk dogs, or sell your clothes to a local shop. Other ideas include becoming an Uber driver, working overtime, or renting out a room in your home on Airbnb.
The key to making your side gig work for your vacation plans is to put all the money you make into your travel savings account.
6. Create a Budget
Most of us cringe when we hear the word “budget.” It feels restrictive and disciplined, but when saving for a vacation, budgeting becomes an exciting challenge.
One way to budget is by dividing up your expenses into different categories. For example, 55% of your income should go towards necessities like rent, utilities, and other bills.
Then the remaining percentages can vary. For example, allow for 10% to go towards leisure, 10% to your travel fund, and 10% to an emergency fund. The remaining amount can be divided up for retirement savings and debt payments.
It’s helpful to use online tools like EveryDollar.com to help you get a visual of your budget. Doing so will allow you to see more ways you can cut down on costs as you subtract your monthly expenses.
7. Consider a Loan
One common question people have about payday loans is, “can I take out a loan to pay for a vacation?” Another is, “will it affect my credit score?”
There are many pros and cons for taking out loans for this reason. But, the answer is yes! You can use a payday loan to help boost your travel fund.
This option is only recommended, however, if you absolutely need extra cash just before your vacation. Or, if you find yourself in an emergency situation while on vacation.
These loans typically come with high interest rates, so it’s important to read through the contract and pay them back on time. If you don’t pay it back, then the loan could affect your credit score.
Saving for Vacation: Gaining Support
Feeling more confident about saving for vacation? To boost your confidence even more, get support from a trusted friend, family member, and/or financial advisor.
Interested in learning more about budgeting? Check out our money blog page to learn more.